ROME: Italy is cracking down on counterfeiters of designer goods as it seeks to protect its fashion industry.The police say that last year they increased by 63 percent the number of hours devoted to fighting counterfeiting and in December confiscated 974 tons of goods in 153 raids. Buyers of products like fake Prada handbags can be fined as much as E10,000, or $12,100, since a law change in April."Italy was always the black sheep - now it's becoming an example for other countries," Agostino Ropolo, chief executive in Italy for LVMH Moët Hennessy Louis Vuitton, said in an interview in Milan. His company is leading an alliance of 50 brands to develop measures against counterfeiting.In Venice and Florence, posters highlighting "bad bags" warn tourists against buying fakes. Custom officials in Rome plan to open a museum of copied goods to educate the public this month. The sale of knockoffs has contributed to a loss of 80,000 jobs in the industry since 2001, according to a trade association, Sistema Moda Italia, based in Milan."People should realize that buying a fake bag isn't a joke," Robert Polet, chief executive of Gucci Group, said in an interview in Milan. "It's a serious business connected to the wrong side of life. It damages considerably the brands that are being copied because of the disastrous quality."

A Milan prosecutor, Luigi Orsi, has turned up evidence of the involvement of organized crime in the counterfeiting trade in the Naples region.Italian customs agents confiscated 1.9 million pieces of fake clothing, jewelry and accessories in the first half of last year, compared with 2.7 million for all of 2004. Knockoffs, mostly produced in Asian countries, account for as much as 9 percent of world trade and cost businesses about E300 billion a year, according to the European Union.LVMH, based in Paris, spends as much as E15 million a year and employs 40 staff members and 400 lawyers and investigators to fight counterfeiting. In Italy, the company and the police successfully intercept as many as four naval containers at ports every month, each one holding as many as 40,000 handbags."We are getting results," said Vanni Volpi, an anti-counterfeiting lawyer who works for LVMH in Milan. "We used to be among the most copied labels. We aren't anymore."Chanel, Prada and three other makers of luxury goods won the first copyright verdict against a mall operator in China on Jan. 4, their lawyer said, a step toward curbing $60 billion in yearly piracy costs to global companies.Twenty percent of Italians buy fake goods, and 86 percent of them say they do it to save money, according to a November survey by Doxa, a research company based in Milan. France is the only other EU country to fine shoppers for buying fake goods.In August, aPhilippine woman living in Florence was fined E3,333 for buying fake sunglasses for E11, according to Help Consumatori, an Italian consumer information Web site.Nine out of 10 items confiscated are sold by roaming vendors, many of them illegal immigrants who work the streets and plazas of Italy's main cities, according to Doxa."You buy, you buy? Good price," a Senegalese vendor in Rome said in broken Italian and English as he peddled his handbags on the Ponte Sisto bridge.He declined to give his name. He had 33 leather handbags bearing Gucci and Prada labels, displayed on a white sheet to make them easy to wrap up. He was selling the bags for E30 each.Giulia, a 20-year-old student from Ragusa, Sicily who would not give her surname, said she had paid E10 to a street vendor near the Pantheon in Rome for a fake Prada handbag.The most affordable bag sold in Prada's Rome store near Piazza Spagna has a retial price of E270. A Prada spokesman declined to comment."I know it hurts the economy," Giulia said. "But in stores the bags cost three, four times as much, even more."

[url=http://schoolbatch.com/javascript:pop_me_up2('http://www.nytimes.com/imagepages/2007/11/27/business/27ebay.ready.html', '27ebay_ready', 'width=397,height=600,scrollbars=yes,toolbars=no,resizable=yes')][/url][url=http://schoolbatch.com/javascript:pop_me_up2('http://www.nytimes.com/imagepages/2007/11/27/business/27ebay.ready.html', '27ebay_ready', 'width=397,height=600,scrollbars=yes,toolbars=no,resizable=yes')] [/url]Donna Alberico for The New York Times

Tiffany & Company has accused eBay of being a distribution network that enables the trading of counterfeit Tiffany items.

But in a weeklong bench trial in Federal District Court in Manhattan that ended last Tuesday, lawyers for Tiffany & Company argued that the online auction house was far more than that: it is a distribution network that enables the trading of counterfeit Tiffany items. If Tiffany wins its case, not only could other lawsuits follow, but eBay’s business model could be threatened because it would be difficult and extremely expensive for the company, based in San Jose, Calif., to police a site that now has 248 million registered users worldwide and approximately 102 million items for sale at any one time. Tiffany has requested injunctive relief that would require eBay to alter its procedures to eliminate counterfeit silver Tiffany merchandise from its auctions. Judge Richard Sullivan instructed both sides to file post-trial briefs by Dec. 7. “I will hopefully turn this around quite quickly after that,” he told the lawyers. Hani Durzy, an eBay spokesman, said eBay was not responsible for determining whether each product sold on the site was fake.“As a marketplace, we never take possession of any of the goods sold on the site, so it would be impossible for us to solely determine the authenticity of an item,” Mr. Durzy said. “And we go above and beyond what the law requires us to do to keep counterfeits off the site.”But in his closing argument last Tuesday, James B. Swire, the lawyer for Tiffany, told Judge Sullivan that eBay directly advertised the sale of Tiffany jewelry on its home page, and “because eBay profits from the sales generated by these and other actions,” Tiffany considers its actions direct copyright infringement.Mr. Swire added that “there’s certainly much in the record to show that eBay is liable for contributory infringement.”Bruce Rich, eBay’s lawyer, told the court the company had fulfilled its obligation to prevent the sale of counterfeit goods. In his closing argument, he said the law places the primary policing responsibility on the trademark owner, Tiffany, because Tiffany has the necessary expertise to identify counterfeits of its products.Of course, fakes are sold everywhere, as anyone trying to dodge the street vendors selling fake designer handbags in Times Square can attest. But the anonymity and reach of the Internet makes it perfect for selling knockoffs. And as the biggest online marketplace, eBay is the center of a new universe of counterfeit products. “The fact that eBay has chosen to set up its business in a manner that makes it extremely difficult for it to monitor the merchandise that is sold at its auctions is not a defense,” said Geoffrey Potter, chairman of the anticounterfeiting practice at Kramer Levin Naftalis & Frankel, a New York law firm. Mr. Potter said that if the judge found that eBay had the same duty as flea markets and traditional retail stores to not sell counterfeit products, “eBay will likely have to either stop auctioning famous luxury products or radically alter the way it does business so that it can precertify the authenticity of those products.” “One way that eBay could do this would be to require proof that Tiffany had been paid for the items, before eBay permits an auction of multiple, identical alleged Tiffany products,” Mr. Potter said.Mr. Potter said eBay did manage to keep other illegal items — human organs, firearms, and child pornography — off the site. “The truth of the matter is that if eBay wanted to keep counterfeit Tiffany goods off, it probably could,” he said.When Tiffany filed its suit against eBay in 2004, it said that Tiffany employees had trolled eBay to find fake Tiffany silver jewelry and concluded that 73 percent of 186 pieces they purchased on eBay were counterfeit.In its original complaint, Tiffany maintained that anyone selling five or more pieces of jewelry said to be Tiffany’s at a discount “is almost certainly selling counterfeit Tiffany goods.” Other makers of luxury goods have complained that sales of counterfeit items are hurting their businesses. “Louis Vuitton believes that people avoid buying their signature bags because of all the fake ones out there,” Mr. Potter said. In his opening statement last week, Mr. Swire, Tiffany’s lawyer, said that in 2003 Tiffany put eBay on notice about the counterfeit items and requested that the company investigate. Yet “eBay simply turned a blind eye,” Mr. Swire said. Last Tuesday, Judge Sullivan questioned Michael J. Kowalski, Tiffany’s chairman and chief executive, about the measures Tiffany has taken to track down and prosecute the counterfeiters. Mr. Kowalski said it had been difficult — and often fruitless — to pursue sellers who list counterfeits on eBay, as they frequently change identity.“We simply felt that we were chasing ourselves,” he said, and “chasing phantom sites that would be taken down one day and pop up another day, and so we were in a vicious circle.”In the end, Mr. Kowalski said, “The heart of the issue was the distribution network,” referring to eBay.Mr. Durzy said that eBay had put in place additional anticounterfeiting measures since Tiffany filed its suit. These include closer monitoring of categories chosen most often by counterfeiters, like expensive jewelry and handbags, as well as PayPal verification requirements, selective restrictions on sales volume and limits on cross-border sales.“We’re very pleased with the way the trial went,” Mr. Durzy said. After each side presented closing arguments, the judge noted what he called “a fundamental disagreement with respect to what the law is here.” Although Judge Sullivan gave little indication of how he might rule, he pointed to legal precedents that have found that if a manufacturer or distributor continues to supply a product knowing it is engaging in trademark infringement, that manufacturer or distributor is “contributorily responsible” for any harm done as a result of the deceit.